Mobile Entertainment

All mobile content retailers want to expand their consumer base and reach the market effectively. But this remains difficult. Studies have shown, for instance, that while many mobile consumers like to play games, few actually purchase them. In most markets, two to three times as many people have played a game than actually downloaded one.

What is the source of this discrepancy? I’d argue the following:

· Price (content price and data charges)
· Game features (time-killer, entertainment, brand, etc.)
· Difficult to access
· Difficult to choose

Studies show that finding games through a browser is the dominant way of locating mobile content. But in many markets, handsets are not set up correctly for data access, or data charges are so high that users are discouraged from browsing. In some European markets, operators are charging from €0.09-0.25 per page click! Furthermore, featuring hundreds of titles on a deck is a cumbersome method of discovery on a screen the size of a matchbox.

While one challenge is to expand the user base, another is to increase sales to the existing users. Telephia noted that putting content on the first page resulted in 53 per cent more downloads than elsewhere, and that games showcased on "New, Featured, or Best Seller" decks received 90 per cent more downloads. Fine for them, but what about the long tail?

Advertising

Advertising for mobile content is also a costly exercise when content sells at around $2 a unit and operators take half. A 30-second advert for $10,000 would have to generate 20,000 sales to recoup. No wonder the subscription model has turned out to be the only viable way for retailers using TV advertising.

Online marketing

Online marketing customer acquisition costs can run up to $20-25 per customer, and doing marketing on the mobile is even more expensive, with CPM rates hovering around $30 or above.

Viral recommendation

The study by Nokia showed that up to 79 per cent of users would try a game demo if received from a friend. Although a seven-dollar purchase decision may not seem like a big decision to make, it is clear that such referrals can have a drastic impact on the amount of content sold.

So the question is, how do you enable referrals as an effective retailing method for mobile content, and what effect does that have on revenue and costs?

The P2P advantage

MoConDi created its own MeYou solution in 2006 as a mobile app that provides the ability to distribute a vast range of mobile content and services to end users. It’s been active in 3 Italy since September 2006 and over 800,000 users have downloaded the application, representing 12 per cent penetration.

We conducted an experiment with two games producing the same download totals and then changed the location, so one game was promoted on the WAP site only, to which potentially four million subscribers had access, while the other was promoted in MeYou, with only 250,000 users. MeYou proved 11 times more effective in selling content, with 250,000 potential users buying 800 titles, while four million potential WAP users bought 1,200 downloads.

Using free content to incentivise referrals and purchases is the most cost-effective marketing vehicle by far. One of our clients, as a result of the increased effectiveness in selling, decided to reduce its monthly marketing budget by a six-figure US dollar amount. Our experiences show that for the top 20 per cent of active users, content ARPU has doubled. Driven by the chance to get free content, they not only recommend heavily to their friends, they also buy more themselves.

On the small screen, we have also found that users have been so satisfied with the viral marketing client, that the majority prefer it to browsing on a mobile site. Small wonder, when on one US operators deck users need to click 17 times or more to purchase a game.

Poor navigation capabilities, high costs with low margins for many industry players, high costs for the end users in terms of both time to discover and retrieve, as well as the price and data charges paid and general ignorance of what is available are creating an industry not realising its full potential.

Our experience shows that P2P referrals are generally acknowledged as the preferred method of content purchase and may hold the keys to unlocking profits for the entire mobile industry if done right. If we can address this, the whole mobile content market will benefit.